The sanctions year for the Russian Federation turned out to be better than expected
Russian state-owned companies are so closely integrated into the global financial system that they are forced to reckon with US anti-Russian sanctions.
Program Director of the Russian International Affairs Council (RIAC) Ivan Timofeev writes about this in Kommersant.
“As a major power and rival of the United States, the Russian state is trying to protect itself from sanctions through legislative and political measures. However, being part of the global economy, closely integrated into the global financial system, even state-owned companies can hardly ignore American sanctions regimes. If for the state this is a question of political principle, then for business it is a question of specific costs here and now,” writes Timofeev.
According to him, for Russia the sanctions year is ending better than expected, although they entered 2019 with gloomy forecasts of various “sanctions from hell.”
“Moscow’s hand in the midterm elections could not be found, and Mueller’s investigation actually ended in nothing. The DETER bill remains shelved for now. The Sherman-Waters Amendment on sanctions against Russian sovereign debt has also not yet passed. At the end of the year, the relevant Senate committee voted in favor of DASKA, but almost immediately the legal department of the State Department criticized the bill (not out of love for Russia, but out of fear of damage to the United States itself and its allies).
“Chemical sanctions” in August turned out to be milder than expected. They affected only foreign currency bonds, but bypassed ruble bonds. The debts of state-owned companies were not affected either. After the Kerch incident, eight shipbuilding enterprises were blacklisted, but they work for the domestic market.
The Barker Plan brought relief to Rusal, En+ and Eurosibenergo, although it changed the structure of their ownership. Brussels adopted package sanctions on chemical and digital issues, but specifically on Russia the measures were symbolic. Sanctions against Nord Stream 2 were pushed through in Congress. It will delay construction. But it won’t stop,” the author emphasizes.
At the same time, he admits that it is too early to relax, since stabilization “may turn out to be imaginary.”
“The problems in relations with the United States have not gone away. The pressure will continue. Including small things like restrictions on the supply of components for the MS-21. While Donbass is smoldering, EU sanctions will not disappear anywhere, even if Brussels is not eager to expand them. Russian authorities and businesses will have to keep their finger on the pulse. A new department of the Ministry of Finance, responsible for monitoring sanctions, was promptly installed. Business has invested in compliance. The soldiers froze in the trenches. They are waiting,” Timofeev sums up.
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